In 2010 the U.S. censured the Guatemalan government for not ensuring acceptable work conditions nor rights of association for its workers.
According to an article in cnn review.com.gt, Ron Kirk, a representative of U.S. Trade, said in a press release, "Although Guatemala has taken positive steps in recent months, their actions and proposals have been insufficient to address what we see as systematic failures."
Having failed to resolve the problem, the U.S. Government will follow the activation process for settlement of disputes referred to in Chapter 20 of the CAFTA trade agreement which could lead to the imposition of a fine and trade sanctions. This will be the first time this mechanism has been activated since the signing of CAFTA in 2006.
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Local and U.S. labor unions have filed a complaint with the U.S. Department of Labor for breach of the rules established under DR-CAFTA.
The U.S. Department of Labor has agreed to review a union complaint against the government of Tegucigalpa for breach of labor laws under the free trade agreement DR-CAFTA, according to an official announcement released today.
The government has made a committment to the E.U. to submit a reform bill and its regulations within 60 days, so as not to adversely affect the labor market.
The U.S. has complained since 2010 that the Guatemalan government has not ensured acceptable working conditions and rights of association for its workers.
The U.S. is withdrawing from suing the Guatemalan State for breach of labor rules before an international tribunal provided by the DR-CAFTA.
"In order to prevent the creation of an international panel that could lead to Guatemala paying a penalty of up to $15 million for violating labor laws, the Government has agreed with the United States to abide by a commitment to a plan to implement policies respecting these rules ", reported Prensalibre.com.
As of May 29 a new Labour Code will come into force as well as the introduction of oral trials in labor lawsuits.
Labor trials are to be conducted orally, and the new Labour and Social Security Code of Nicaragua (Law 815) also allow workers to file their application before a judge verbally.